Alleycat,
First off, let me tell you how sorry I am that you are having to go through this. We had hospice come into our home in September to help with my mom. Hospice was the best thing that we could have ever done to help us. We got hospice set up through the hospital when she was released from the hospice. I would suggest calling the dr and asking for their recommendations about which hospice organization to use. Hospice and the dr will work together. My mom was on medicare and hospice was paid for 100%, so was her medication. Check with blue cross, but I imagine that they would do the same way. Hospice varies about how often they will come to your home depending on how much they are needed.
Hope that this helps a little, Amy